BFM Podcast Interview with George Lee, Founder and CEO of Innov8tif

Innov8tif recently took center stage on BFM's "Open For Business" podcast, where George Lee, the company's founder and CEO, shared his in-depth view into Innov8tif's remarkable growth journey. George highlights how Innov8tif’s eKYC innovations, including their proprietary IC microprint verification, have been instrumental in the digital transformation of these industries. As a nominee for the EY Entrepreneur of the Year 2024 Malaysia awards in the Technology Entrepreneur Category, George discusses the challenges of scaling a tech business in an evolving digital landscape. Looking ahead, George emphasizes Innov8tif's ambition to expand its reach regionally while reinforcing its reputation as a trusted digital enabler in the industry. This episode is a must-listen for anyone interested in the journey of a tech startup that has become a major force in Malaysia’s digital economy. Below is a full transcript of the podcast: > This is a podcast from BFM 89.9 The Business Station. Good morning and welcome to Open for Business, the show that dives into the journey's adventures of entrepreneurs and business leaders. I'm Roshan Kanesan and today I'm joined in the studio by George Lee, founder and CEO of Innov8tif Solutions, a player in the electronic Know Your Customer space or more commonly known as EKYC. And if you don't know what that means, don't worry, we'll break it down a little later. George has been nominated for the EY entrepreneur of the year 2024 Malaysia Awards in the Technology Entrepreneur category and this company was founded over 10 years ago back in 2011 and has grown in the identity verification space to now serve about 70% of the telco and banking sector in Malaysia. Over the years, George and his team have not only developed a suite of solutions for secure digital customer onboarding, but have also earned patents, including one for verifying IC microprints. Recently, Innov8tive Solutions made headlines with the announcement that Datasonic Group is acquiring a 51% stake in innov8tive holdings for $40 million ring it from Revenue Group. This strategy partnership reportedly aims to enhance innov8tive resources and accelerate growth as they continue to make waves and innovate in the digital identity verification space and scale their operations across new markets. So in today's conversation, we'll talk about where the business is today. Take a look back at where this business came from. Talk a little bit about the numbers as well of course and the ambitions ahead in this rapidly evolving digital space. George, welcome to the studio. How are you doing? I'm good. Thank you. Thank you for having me here. After offline, you told me that the last time you were on BFM, two things. One, it was in our old office. So we're talking about 2016. So a long, long time ago, I'm assuming a lot of things have changed and we'll explore that in more detail. But I want to first break down EKYC. This is maybe something that's familiar to people in the tech space or the fintech space. But even to other entrepreneurs, this may be something that just hear and just disregard, right? Like, oh, it's something I need to do or something along those lines. So could you tell us a little bit about your main offerings today? More importantly, how we might have interacted with the products that you make in our own lives? Yeah, sure. Yeah, so I mean, no worries. EKYC is not just something alien to consumers, but even to businesses as well. I remember in the early days where we were pitching the concept of EKYC even to our enterprise customer, they were like, oh, what is this? Why do I need it? And then they look at it and they say, oh, this is a nice to have. Maybe we can do some prototype and POC. Those were the early time when Bang the Gala was in the sandbox. That was like 2016, 2017, 2018 time. We were still early and people say, okay, let's go through the sandbox and all those kinds of stuff. And when COVID hits during the MCO and suddenly this is something that everyone needs and we were working like mad during the COVID time because of this. Yeah, so essentially what it is is that many of you would probably have already used it before, but you didn't know it. So when you sign up for some e-wallet and they ask you to take a photo of your My Card, do a selfie. Now, technically, that is EKYC. Traditionally, I mean, this term came from the banking industry, right? It's called knowing your customer. So E is basically electronic. Now knowing your customer process has really been there forever. Basically, what it is is that if you go to a bank, if you open the bank account, they will ask for your IC, they will ask you to fill in a lot of things and all that. But actually at the back office, somebody needs to check if you are who you say you are. The bank needs to know who you are. And this is an anti-mine laundering measure. Exactly. Yes, but then how do you move this process from a back office process to something electronic where consumers do some self-service and immediately you can process and get some sort of result. So this is what EKYC is all about. So many times whenever you scan your IC, you scan your passport. So it's not just limited to IC. It can also be passport when you apply for, let's say your e-visa and things like that. You might have experienced that before as well. Or when you… If you're applying for Australian visa, for example, you have to scan your passport or your address. Exactly. Yes, that is exactly part of what EKYC is. And even activating Telco Line. If you get a prepaid today. Yes, that's true. Yeah, they don't activate it for you anymore, right? You go to the shop and then write your number and all of that. No, no more. Because all those are opening up to too much fraud or agent getting your data. So it's also part of data protection. Take it out of the hands. Exactly. And so you just scan it and activate your SIM card. So all those are basically EKYC. You primarily operate in the Telco and banking spaces? Yes, for now, yes. Mainly also because these are the regulated industry in one way. And second way is that these are also the current use cases that have a strong need for EKYC. Now give us a sense for, I guess, your market positioning at the target market here, right? Because we just mentioned, obviously Telco and banking is a big space for you. But we've also seen, I guess, the pandemic has kind of kicked off the rapid adoption of EKYC in particular. Tell us a little bit about the market positioning today. Well, today we are also looking at basically moving into other sectors. So especially we see a lot of traction in still the financial but things like basically investment. So you want to do any online investment, be it crypto or P2P or crowdfunding or whatever. So definitely those you need some sort of EKYC. But we're also promoting the concept to basically the other markets which we don't see a lot of, not just market share, but we don't see a lot of market usage yet. So for example, property segment, can you EKYC your tenants? You cut off all the stories of horrible tenants and all those. So how can we move forward by doing a EKYC and then people will know, "Oh, don't play a fool, right? I have my proper validated identity and all this and that." Property sector, we have people like car rental coming in, acquiring our using our technology. We have even car dealerships. So more and more, as long as you started as a requirement to know who you say you are as a regulatory, to moving forward as something that can help business to fast track their business process. That is very interesting to also see the other areas. And I guess people want to know their customers better to protect themselves as well. And I guess we take it for granted, right? In terms of like today I'm opening up a new e-wallet app or the other day I subscribed for prepaid number, take photos, scan my face. It all just seems so easy on the consumer's end. But I'm sure it's a lot more difficult on your end or challenging. Could you give us maybe, what do you think that most people take for granted or misunderstand about EKYC? Yeah, so I think the biggest misperception is that people will think, "Oh, it's very easy, EKYC." I have a camera, I take a photo and I have some server to process it and done. But there is actually more to that when you talk about EKYC. So what we do is that we use, of course we use a lot AI. We have a pretty strong AI engineering team. And what our R&D team do is basically to come up with models of how to process all these photos of my cards that you have captured or passport or whatever ID card that you have captured. Make sure that there are no fraudulent elements on there. What about people pasting somebody's else's name on a real mic card? Photoshop, taking it from a computer screen. So there are a lot more to that. So we check for liveness. Make sure that the person is real. That's why I have to turn my face in all of that. Yeah, those are one of the technology but we have actually moved beyond that. Now it's basically seamless. You just take a photo and it's done. Because those that you move your face and all that, there's still some way to break it. Because technology can be evolving. I presume that it's also more expensive. Yes, it is. But it's more secure as well. And that's very important. And when you talk about not just that, and then there's the continuous improvement that we need to do. Because EKIC is not something you build once and you sell. Correct. Because you do something, they get better, then you have to get better. Exactly. Yeah, we have AI team, so does the fraudster. We'll talk about R&D in a little bit. But before we go into a few messages, could you walk us through the current product mix today and that you've introduced over the last few years, especially in terms of the patented stuff? A lot of our patent involves around how do we basically use AI to validate the security or validation of the identity card. So it could be hologram detections, it could be the method that we use. So all these are basically done in a way that basically is still validating of identity documents. Then we are also having a lot of biometric, facial biometric solutions. So we talk about life, nurse, facial. Now the use case is not just onboarding. How about moving forward where you need to authenticate a payment? Lot of fraud now, right? Banking and all that. Yeah. So that's another offering. But we also do provide services to basically do onboarding, develop onboarding app, for example. We use some local platform also to help customers to digitize their business processes. Actually, that's another part of our business that's always ongoing, but it didn't get the limelight. Because those are more services, enterprise solutions, as we digitize business processes for customers. We'll talk more about that later because digitalization is the story that keeps on going. Every year, it's again about digitalization. Because we haven't realized a lot of it. The term I saw when talking about your patents was, IC MicroPrince. Could you tell us a little bit about what that means? So if you look into your mind card, you see a lot of wavy lines in the design of the mind card. But if you take a very close look, sometimes you can see, sometimes you can't know, you can just take a snapshot with your mobile phone, zoom in, you can see the word Karajan Malaysia. I'm looking at my IC right now. Yeah, you can see the word Karajan Malaysia. It's just the wavy line you're looking at. But you've got to look really close or you use a smartphone. They're actually wording that. So if someone were to duplicate or rather, I would say, let's say I take a photo and I print out, the quality of the word there would not be as clear as it's supposed to be. So we are actually doing this kind of detection. Okay, okay. George, we got more to get into, of course, including the why, the why you entered this business in 2011, which we will do after a few messages. Folks, I've been speaking with George Lee, founder and CEO of Innov8tif Solutions, a player in the electronic know your customer space, more commonly known as EKYC. George has been nominated for EY entrepreneur of the year 2020 for Malaysia in the technology entrepreneur category. I'm Roshan Kandesan. You're listening to Open for Business. We'll be back in just a little bit. So keep it here to BFM 89.9, the business station. Build fortunes modestly. BFM 89.9. BFM 89.9. Welcome back to Open for Business. I'm Roshan Kanesan and this morning I'm speaking with George Lee, founder and CEO of Innov8tif Solutions, a player in the electronic know your customer space, more commonly known as EKYC. Innov8tif serves around 70% of the telco and banking sector here in Malaysia and recently met headlines with the announcement that Datasonic Group is acquiring a 50% stake in innov8tif holdings for 40 million ringgit from Revenue Group. George has been nominated for the EY entrepreneur of the year 2020 for Malaysia awards in the technology entrepreneur category. George, we talked a little bit earlier about where the company is today, about 12, 13 years after you've started this company. And it's come a long way. But I want to go back in time a little bit and go back to the point where you decided, hey, I'm going to start my own business and it's going to be about EKYC or KYC. Tell us a little bit about what inspired all this. Well, we started in 2011 and back then I can tell you there's no EKYC. Because even if you think back, in 2011, what kind of phone were you using? The smartphone wasn't so smart yet. 2011, I think. Was it an iPhone 4? Yeah, it was some time later but there were not many apps. If you think about it, most of the apps were from maybe America or the West. Blackberry was quite big back then. It was huge. So you think of it back then, there wasn't even much app even developed locally. It was just a starting point. So there was really no EKYC because I think maybe half of the population was featured phone. Generally identity verification? No, we never even get there. So when we, I mean the reason why we started this company. So me and my other founder, Tien Sun, my partner. And then we had the idea to start this company purely because we were all working in this public listed solution company software. So in the software as well, I was with them for 11 and a half years. I think Tien Sun was there for probably seven to eight years. And we always have this Tate Tarei break and we will sit down and we will look at the news and we say, "Oh, how come this American startup have this kind of funding and all this and then we will brainstorm my idea." I mean, it's just for fun. You know, World Roti Channa and Tate Tarei. That's explained my size as well. And we will say, "Hey, let's do this. Let's do that." But he was always talking. Then one week later, the news come out, some American startup got this X million to do this idea that we talked about last week. So we always had that. But then you know, at that point, you just have the inspiration. You want to do it and you just doesn't have the… Do you remember the idea was? I can't remember. I've actually too many of them. Yeah, there were so many of them. And we always say you want to do it. But then it's like, can we afford to do it? You know, you have to pay your car in Stormont house. You know, that time I just switched or just got another house and we got to paying for in Stormont and all that. And at that point, you know, it's like almost the time to get married and should I do it now? Should I do it later? But you come to a point that you start to think it'll be even harder when you have kids, right? But you just don't have the guts to do it, you know, but at that point of time, so happened one of our ex-colleague, Wendorf started his company. He has a project and he needed help. And he said, George, you've always been talking about starting your own business. I want to give you a chance now. I have this project, but I don't have enough people to deliver. I'll take you as a subcon. You come in, work with my team, help me to deliver this project and this X amount, you can use it to start your company. So to me, that's brilliant, right? Yeah. So, but you know, I'm more a business guy, right? My background, I was being with advertising company actually, when I first started study part time, while I was in the ad agency. And then I moved into an IT company. And then, but I needed someone who knew how to do programming. It's like, if I want to open a restaurant, I better make sure I have a chef with my partner. Yes. You know, so I approached them soon and surprisingly he said, "Yeah, okay, let's do it." So all the RootChart and Databricks are finally coming to fruition. Yeah. But of course, we know we have this money coming in and all that, but then we say, "Hey, we still need some money to start things up, right?" Yeah. So I look for another one of our ex-collect, you know, BingDum. And we say, "Hey, BingDum, you seem to have a lot of money, accounting guy, save a lot of money, you want to come in and so you put in a bit of money and three of us." And that's how we started Innov8tif back in 2011. So what would you say ultimately gave you this confidence to do this, right? Was it the fact that you had planned it out and you're like, "Okay, I've hedged my bets here. There's a project. Money is coming in. I got some funding here on the other side." Was that what gave you the confidence to do this? Yes. Yes. So when all that align, then we have the confidence to get into it. Of course, the reason is whether the project will be successful, whether you get all your money. But at that point, the pushing motivation was also, "You better do this before you start your family and all that." If you're going to do it, do it now. That's the kind of sense. Yes. And then we did it. Yeah. But of course, in the early days, if you asked me what was… But you didn't also jump without knowing, right? You kind of planned it out as well. Yes. It was foolhardy about it. Well, we planned up to what we know, which is the completion of the project. What you can do. After that, then it was okay. Let's figure that out later. So it started off as a software development business. Yes. So you helped a friend of yours with a project. They needed the manpower, essentially. So from the time that project ends, then you've got that first P&A. What happens after that? Yeah. So we then look at… So very simple. So what we do is that we then talk and we say, "Okay, let's look at what we know how to do." All right. So what we know how to do is, okay, we know how to build portals. We know there's this local platform that we know how to make use of it to help businesses to digitize their business process. So that's what we did. So we take that and we start to offer. And of course, we were like, "Oh, it doesn't matter. It's more of a big project." We just go after every single thing. But we were a bit lucky. So we got quite a bit of a project to help us sustain. And then we hire again, we had to hire all the people we know. So we keep hiring from our ex company. We didn't pinch anyone, by the way, but these are people who have left. Just to get it right. Then we grew to a five-man team and then we started to look. But in the heart, we always say we want a product because coming from custom software development business, we know this is not something that can sustain you in the long run. Not super scalable either. Yes. And you hire all the people and don't know project then. It's very manpo